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Thursday, February 14, 2013

What is the impact on worker’s compensation from aging Baby Boomers who have postponed their retirement, working much longer than the previous generation? In a recent study by the NCCI (National Council on Compensation Insurance, Inc.) some interesting and surprising conclusions resulted. It is not surprising that the number of older workers is increasing. The study looked at the frequency and severity across age groups and tried to identify factors that accounted for the severity of injuries between older and younger workers. Among the key findings are the following:

The major difference among age groups occurs between the 25-34 and the 35-44 age groups. All workers 35-64 appeared to have similar costs per worker. These reassuring findings suggest an aging workforce may have a less negative impact on the lost cost per worker than many analysts originally thought.

Many workers’ compensation professionals have the belief that younger workers have a much higher injury rate. That appears not to be true any longer. Differences in frequency by age have virtually disappeared.

The major factor involving older workers involves severity. Older workers tend to have more shoulder rotator cuff claims and knee injuries while younger workers have more back and ankle sprains.

Higher wages for older workers are a key factor leading to higher costs for older workers. On the medical side, more treatment per claim has increased medical costs.

The study indicated that older workers account for an increasing share of the U. S. workforce. In particular, the share of workers age 55-64 has been growing steadily. The number of workersage 45-54 has increased modestly. Workers over 65 were about 3% of all workers in 2000 and about 5% in 2010. Taken as a whole, the percentage of workers over 45 has increased from 34% in 2000 to 42% in 2010. (Our practice has seen a similar increase in older workers, many of whom must remain in their positions due to reduced or non-existent pension benefits, wage and benefit cuts, and an overall poor economy.) For more on the working Baby Boomer generation, check back with us next week.